Bermuda-based re/insurer Hiscox Ltd said first-quarter sales fell eight percent in a “tough” market but the company expects to see double-digit rate rises for US catastrophe business.Gross written premiums declined to £453.5 million ($743.4 million) in the year to March 31 compared with £504.1 million a year earlier, the firm said yesterday in a statement.However, premiums sold out of Hiscox’s reinsurance platform in Bermuda bucked the trend by rising almost two percent to $139 million in the first quarter from $136.3 million in the same period of last year.“We continue to underwrite for profit over volume in these tough market conditions,” chief executive officer Bronek Masojada said in the statement.“This discipline has allowed us to keep our powder dry and we are ready to take advantage of rising reinsurance rates. Our own reinsurance cover remains substantially in place for the upcoming US hurricane season.”Hiscox’s wrote £182.4 million ($297 million) in gross premiums from its principal underwriting centre in the Lloyd’s of London market. This represented a fall of almost one fifth from last year’s figure of £234.8 million.Hiscox said its claims estimate for the New Zealand earthquake was unchanged at £60 million. Its claims estimate for the Japanese earthquake was also unchanged at between $60 million and $150 million.Much of the business written through Bermuda is US property-related, business that is likely to grow in volume after an expensive first quarter wiped out billions of dollars of industry capital.“The recent catastrophes have changed the market,” Hiscox said in its statement yesterday.“Reinsurance rates are now back to 2010 levels with increases in some areas, especially in the Asia Pacific. We expect increases to become widespread during the June/July renewal period with potential average rate rises of around 10 percent in US catastrophe business, as the market is also impacted by the new RMS 11 model.”Others in the industry, including Lancashire CEO Richard Brindle and XL Insurance Bermuda president Patrick Tannock last week, have also cited the new hurricane model introduced this year by catastrophe modeller Risk Management Solutions as a factor likely to put upward pressure on rates.Hiscox said its invested assets, which totalled £2.8 billion ($4.6 billion) at the end of March yielded a return of 0.4 percent in the first three months.“Whilst the timing remains uncertain, our expectation is that interest rates in the US and the UK will rise,” Hiscox stated. “Duration will therefore remain short in our US dollar and sterling bond portfolios in line with our focus on preserving capital rather than chasing yield in current market conditions.”